Close Brothers is back on the look-out for acquisitions after unprecedented gains from private equity, property and performance fees more than doubled asset management full-year profits and pushed group profits up more than a fifth.

The UK financial services group, which today posted its full-year results to the end of July, made two small fund-related acquisitions for undisclosed sums during the period and also acquired a 49.9% stake in market-maker Mako Global Derivatives after its financial year-end for an unknown fee.

Close Brothers said it had reviewed larger deals but decided against the move because “especially in the asset management area, the market was very competitive and prices high, and we have not been prepared to purchase where we have not seen value”.

However, the group today raised the prospect of further acquisitions, saying: “Until recently, the climate has not, for us, been conducive to making such value-enhancing acquisitions. We believe that this is now changing and that therefore it is important to retain an unquestionably strong balance sheet to ensure the flexibility to be able to move quickly to secure transactions should the opportunity arise.”

Close Brothers revealed in a statement it booked £43m (€62m) from performance fees and investment gains, adding that “private equity and property-related gains and performance fees have been a regular component of our asset management profit, though never on the scale of this year”.

The gains helped more than double profits from asset management to a record £78m, which together with a record year in corporate finance offset a flat performance in its banking business and a slight drop in securities trading profits. Private equity business also helped boost results on the corporate finance front.

Group pre-tax profits rose 21% to £190m, but would have dipped slightly without the exceptional gains.

Close Brothers said of the flat banking profits: “We have deliberately chosen not to seek to grow our loan book at the expense of margin or underwriting quality…High levels of liquidity have led to much aggressive lending in the market, but we have resisted the siren calls to participate in this process.”

It said the record full-year results has further strengthened its good capitalisation, and outlined plans to pay a 25p-per-share special dividend for the year on the back of the unprecedented exceptional gains, alongside an equivalent final dividend.